China Creates Housing and Construction Ministry

The National People’s Congress proposed creating a new Ministry of Housing and Construction as part of a ministry reshuffle. It would be the first ministry that specifically looks at housing needs.

The new ministry would encompass commercial real estate and government subsidized housing. Previously, the construction ministry focused on real estate regulation, overlooking housing needs of middle- to low-income people. The new ministry would replace the current construction ministry whose supervision of public transportation would be shifted to a new Ministry of Transport, Caijing reported.

The government recently shifted its policies to boost public housing, allocating 6.8 billion yuan for building low-rent flats in 2008 — a 33 percent increase in spending compared to last year.

Industry insiders, however, have expressed some concerns about the new ministry’s effectiveness. For example, they say government regulators will have to compete against the interests of other ministries — including finance, tax and land agencies — which could reduce the effectiveness of any policies aimed at controlling real estate prices. Untangling such a complex web of interests could pose a major challenge for the new housing ministry’s leaders.